In retrospect, given the rapidly shifting trends, the volatility between having and being stocked out of merchandise makes sense, and it was a challenge to any retailer trying to forecast what might be needed, where and when. Where stores have traditionally gotten by re-stocking shelves only once or twice a day, this has now drastically changed in order to fulfill growing demand occurring at new times throughout the day.
When demand suddenly increases in various departments concurrently, how does a retailer know where to prioritize resources? How can they anticipate where demand will continue to grow, stabilize, or shift as external factors continue to evolve and influence change?
This brings us full circle to the imperative of data-driven category management. Throughout the pandemic, we have seen access to comprehensive and collaborative data and analytics tools become the dividing force between successful retailers and brands, and those that experience difficulties.
A single source of truth is essential for cross-organization collaboration, providing near real-time insights to products, categories, transactions, loyalty, item movement, and inventory levels to all stakeholders, simultaneously. But enabling internal collaboration is not enough. Sharing data with external partners is one of the only reliable ways to recognize, react, and respond quickly enough to address volatile consumer demands across the omnichannel.
Enhanced supplier collaboration expands the ability to dig deeper into the known and unknown challenges ahead, facilitating the delivery of more targeted, localized assortment planning at the household level — addressing competitive advantages in time to meet the ever-changing demands of today’s consumer.
Pandemic challenges aside, retailers have become very adept at executing promotions and loyalty campaigns. However, if they don’t have the goods on their shelves and availability online, how can they fully measure and determine successful outcomes while planning for the future?
The current environment of uncertainty and change is merely highlighting existing deficiencies and opportunities to address evolving demands. Integrating inventory data alongside sales and loyalty allows you to acknowledge and address stock-outs as they occur and optimize your assortment and promotional strategies in real-time.
Retailers without this foundational, data-driven category management strategy in place will be challenged to respond to customers quickly and efficiently enough to survive in the long run.
Inna Kuznetsova is CEO of 1010data, a provider of analytical intelligence and alternative data, enabling financial, retail and consumer goods companies to monitor shifts in consumer demand and market conditions and rapidly respond with highly-targeted strategies.